Relative Cohort Size, Relative Income, and Women's Labor Force Participation 1968-2010
Relative cohort size – the ratio of young to prime-age adults – and relative income – the income of young adults relative to their material aspirations, as instrumented using the income of older families their parents' age – have experienced dramatic changes over the past 40 years. Relative cohort size has been shown to cause a decline in men's relative wages – the wages of young relative to prime-age workers – due to imperfect substitutability, and the results here show that this applies perhaps even more strongly to women's relative – and absolute – starting wage. Relative cohort size first declined by 30% and then increased by 47%. Results here show that those changes explain about 60% of the declines in women's starting wage – both relative and absolute – in the first period, and 100% of its increase in the second. Relative income is hypothesized to affect a number of demographic choices by young adults, including marriage, fertility and female labor force participation, as young people strive to achieve their desired standard of living. Older family income – the denominator in a relative income variable – increased by 58.6% between 1968 and 2000, and then declined by 9%. Its changes explain 66% of the increase in the labor force participation of women in their first five years out of school between 1968 and 2000, and 75% of its decline thereafter. The study makes use of individual-level measures of labor force participation, with instrumented wages, and employs the lagged income of older families in a woman’s year-state-race-education group to instrument parental income and hence material aspirations.
|Date of creation:||Aug 2011|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Pencavel, 1998. "The Market Work Behavior and Wages of Women: 1975-94," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 771-804.
- Mark C. Berger, 1984. "Cohort Size and the Earnings Growth of Young Workers," ILR Review, Cornell University, ILR School, vol. 37(4), pages 582-591, July.
- Easterlin, Richard A & Macdonald, Christine & Macunovich, Diane J, 1990. "How Have American Baby Boomers Fared? Earnings and Economic Well-Being of Young Adults, 1964-1987," Journal of Population Economics, Springer;European Society for Population Economics, vol. 3(4), pages 277-290, December.
- Oded Galor & David N. Weil, 1993.
"The Gender Gap, Fertility, and Growth,"
NBER Working Papers
4550, National Bureau of Economic Research, Inc.
- Angrist, Joshua, 2001.
"How Do Sex Ratios Affect Marriage and Labor Markets? Evidence from America's Second Generation,"
IZA Discussion Papers
368, Institute for the Study of Labor (IZA).
- Josh Angrist, 2002. "How Do Sex Ratios Affect Marriage and Labor Markets? Evidence from America's Second Generation," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 997-1038.
- Chinhui Juhn & Simon Potter, 2006. "Changes in Labor Force Participation in the United States," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 27-46, Summer.
- Shoshana Grossbard & Catalina Amuedo-Dorantes, 2008. "Cohort-level sex ratio effects on women’s labor force participation," Review of Economics of the Household, Springer, vol. 6(3), pages 309-309, September.
- Bruce A. Weinberg, 2000. "Computer Use and the Demand for Female Workers," ILR Review, Cornell University, ILR School, vol. 53(2), pages 290-308, January.
- Sherwin Rosen, 1992. "Distinguished Fellow: Mincering Labor Economics," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 157-170, Spring.
- Quinlan, Daniel C & Shackelford, Jean A, 1980. "Labor Force Participation Rates of Women and the Rise of the Two-Earner Family," American Economic Review, American Economic Association, vol. 70(2), pages 209-212, May.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5913. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.